Just as the United States housing market was showing signs of a cautious rebound for the spring buying season, the extended conflict in Iran has blunted the recovery in all but select markets, according to several economists and real estate agents around the country.
“First, it has unquestionably increased interest rates, including mortgage rates, by pushing up inflation and the inflation premium that feeds into interest rates on longer-term borrowing,” said Brad Case, the chief residential economist at Homes.com. “Second, it has probably increased uncertainty among potential buyers, and even sellers, since most sellers will then become buyers. Many buyers, especially first-time home buyers, have the option to wait until the bigger picture looks more certain — which could be next spring’s home buying season.”
Dag Eliason, an agent at Hilton & Hyland in Beverly Hills, said that when the war began two months ago, he saw buyers abruptly withdraw offers, with some even pulling out of escrow. The spring sales pause has meant that homes that sat through the winter were not cleared, causing a bottleneck. “All of a sudden we’re up to a median of 80 days on the market,” said Mr. Eliason. “That’s the longest for properties to sit here in five years.”
Last winter, after the Palisades and Altadena fires threw the Los Angeles market into disarray, Howard Lorey, executive vice president at Nourmand & Associates in Beverly Hills, expected to see a strong rebound in 2026. But like Mr. Eliason, he instead saw an immediate pause on purchases when the conflict in Iran began. Mr. Lorey said the Federal Reserve Board’s decision to hold interest rates steady in the face of supply disruptions and higher energy prices “had an immediate ripple effect on buyer behavior.”
According to the latest National Association of Realtors sales report, existing home sales decreased by 3.6 percent from February to March. And the organization lowered its forecast for existing home sales to 4 percent growth for the year, down from a 14 percent growth forecast in January.
Ricardo Rodriguez, an agent with Ricardo Rodriguez & Associates/Coldwell Banker Realty in Boston, said he had also been expecting a robust spring rebound, but has seen more of a bifurcated market. “What we are seeing is a good pattern of activity at entry level, and then at the ultra high end,” he said. “The mid-market or the entry level luxury, those are the homes seeing the most difficulty on the market right now.”
Midlevel luxury buyers, purchasing in the $2 million to $5 million range, tend to be more sensitive to market volatility, and more serious about building — or losing — assets, Mr. Rodriguez said.
There’s less of a divide in South Florida, where buyers appear to be tuning out the economic effects of the war, said Craig Studnicky, a longtime Miami agent who publishes the quarterly Miami Report market analysis. “When I compare January, February and March of 2026 to 2025, we have seen sales double,” said Mr. Studnicky, also the chief executive of real estate firm ISG World. “Literally double, and at every single price point, whether it’s a condo or a house.”
Even he is surprised, especially with the borrowing rate hike. “As of the first week of March, the 30-year fixed rate mortgage hit 5.9 percent — the first time it hit below 6 percent in three years,” he said. “As of the last week of March, it hit 6.6 percent; it went up 60 base points, all in reaction to the price of oil going up, which is all caused by the Iranian war.”
In a positive sign for many in the industry, pending sales increased 1.5 percent from February to March, according to NAR, indicating a pent-up demand.
“What we are looking at moving forward is hard to say,” said Mr. Eliason. “The good house will sell. It might just take a little bit longer.”
